This marks the second visit to Bolivia by ITA staff in 2024 following an earlier visit by ITA’s Sustainability team to learn more about supply from mines operated by cooperatives.

In La Paz, ITA staff met with the Vice Minister of Mining, Allen Marcelo Ballesteros López and representatives from Bolivia’s statistics agency to discuss the country’s strategy for growth in the tin industry and opportunities for collaboration with ITA.

We also met with regulator Senarecom to gain a deeper understanding of their role in managing the commercialisation of tin, and spoke with a mining cooperative about the unique and important role that these organisations play in Bolivia’s tin industry.

ITA visited each of Bolivia’s three tin smelters in Oruro—including EM Vinto, the world’s seventh largest refined tin producer—to hear directly about the challenges and opportunities for growth across the country.

ITA was welcomed at Bolivia’s largest tin mine, COMIBOL Huanuni, and at Catavi-based Cooperativa Multiactiva to see their mining and processing operations.

As the world’s fifth largest producer of refined tin, Bolivia plays a critical role in the international tin industry and holds significant potential for the future as the country looks to increase its production to meet growing demand, driven by energy transition technologies.

We thank International Tin Association Chairman and OMSA General Manager Mariano Peró for hosting our visit to Bolivia. ITA represents 70% of global tin production and remains committed to leading the tin industry towards a sustainable future through engagement across the supply chain and with major stakeholders.

OMSA is a member of the International Tin Association.

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Local media in Bolivia is reporting that EM Huanuni has begun operating its Lucianita processing plant. Earlier this year, COMIBOL – the Bolivian mining authority that owns the mine – announced that it would begin operating Lucianita from the beginning of May.

Construction of the plant was completed in 2015 to replace the aging Santa Elena and Machacamarca units. However, issues – including a lack of a water recirculation system – meant that the plant could not begin processing ore immediately. Attempts to bring the plant online in 2018 also failed due to electrical and mechanical issues. Since the tender for the processing plant in 2010, production at Huanuni has fallen from 9,751 tonnes to a stable level of just over 7,000 tonnes – excluding 2020 when output fell significantly due to COVID-related closures.

The US$54 million investment into the new infrastructure at Huanuni aims to increase processing capacity to 3,000 tonnes per day. This would nearly double the existing capacity at the mine and increase monthly tin production by 500-700 tonnes. “We hope to reach 1.6% with a head grade and reach 500 metric tons per month and it will definitely position Huanuni as one of the best companies, not only here in Bolivia but also internationally,” said Ramiro Villavicencio Niño de Guzmán, Minister of Mining and Metallurgy.

Our view: Production from EM Huanuni was hit in 2020 due to issues at the country’s main smelter, EM Vinto. The mine produced some 5,469 tonnes of tin-in-concentrate last year, down 1,604 tonnes (23%) from 2019. In Bolivia, exports of tin ores and concentrates are only permitted if smelters in the country cannot process the material. Therefore, while the mine was closed for several months due to COVID restrictions, it was able to continue operating despite EM Vinto running into financial issues.

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Empresa Minera Huanuni plans to restart the Lucianita processing plant from 1 May, according to an announcement from COMIBOL.

The Huanuni mine relies on the aging Santa Elena processing plant. This plant sees the bulk of the 1,500 tonnes processed daily, with some 200 tonnes reportedly going through the Machacamarca plant. However, in recent years, EMH has struggled to maintain output. Tin-in-concentrate production has fallen from 9,174 tonnes in 2012 to just 5,469 tonnes in 2021.

To combat the fall in production, a US$50 million contract for a new processing plant was awarded to Vicstar in 2011. The new plant – “Lucianita” – aims to increase processing throughput to 3,000 tonnes per day.

Although the new Lucianita plant was inaugurated in 2015, the plant did not begin operations. The lack of a tailings dam and water recirculation system made it impossible to begin processing material. In 2018, test work began at the facility, but again the plant could not begin operations. Reports of electrical problems, as well as damage to machinery, halted commissioning at the time.

This time, however, the national mining company, COMIBOL, believes that the processing plant will begin full operations. According to the announcement by COMIBOL, Vicstar will be paid another 5 million bolivianos to oversee repair work. The construction company will also have to guarantee the processing plant for one year.

Our view: In its 2016 – 2020 Corporate Strategic Plan, COMIBOL assumed that Huanuni would reach 11,141 tonnes of tin-in-concentrate and 1,780 tonnes of zinc-in-concentrate by 2020. This was likely on the basis of Lucianita coming online in 2017 and ramping up over the next year. We assume that Huanuni will operate as normal in 2021, despite the spread of COVID-19 in the country, and so it is likely to reverse the significant decline in production last year even before including the impact of Lucianita. It will likely take around one year for Lucianita to reach nameplate production.

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The latest statistical data released by the Bolivian government has indicated the severe impact of the coronavirus on tin mining and smelting in the country during the first quarter of 2020.

Mining in the country is conducted by the two mines owned by the state mining organisation COMIBOL, as well as smaller mines and cooperatives. The state-owned Huanuni and Colquiri mines produced some 3,366 tonnes of tin concentrate during the first quarter. Other operations produced a combined 2,489 tonnes.

Total tin concentrate production (5,855 tonnes) was down some 30% year-on-year (YoY). In late March, it was announced that mining operations in the country would be locked down due to the outbreak of the coronavirus.

In terms of refined tin production, the state smelter EM Vinto produced some 2,890 tonnes in the first quarter. This represented 73% of the total refined tin produced in Bolivia during that period. Smelters were also subject to restrictions beginning at the end of March, reducing output. Despite this, total refined tin production in the country was some 14% higher than in 2019.

However, data for the second quarter indicated a significant decline in smelter output. During the peak of coronavirus restrictions in the country, total refined tin production was 1,321 tonnes. This was a decline of nearly 66% quarter-on-quarter and 69% YoY.

Weak demand and lower production in the first half of 2020 saw exports of refined tin from Bolivia fall some 31.7%. 5,171 tonnes of tin were exported from Bolivia in 2020, compared to 7,574 tonnes exported across the same period in 2019. Of the total exported in 2020, EM Vinto sold 3,759 tonnes: some 73%. The United States was the most significant destination, taking 40% of the metal by value.

Our view: Even without coronavirus restrictions, it is estimated that mined tin production in the country would have been significantly lower than in 2019. Based on 2019 annual production, it is estimated that the mine closures removed around 900 tonnes of tin concentrate from the market. Total production would therefore have been around 6,900 tonnes without the lockdown, some 1,500 tonnes lower than in 2019. We expect official Q2 data to show an even greater decline in mine production due to the continued and longer-lasting lockdown measured imposed.

For refined tin production, however, coronavirus-related closures appear to have held back forecast growth.

In Q1, it is estimated that the smelter closures removed roughly 550 tonnes of refined tin from the market. Had the smelters not been forced to close, total Bolivian production in the quarter could have been some 4,400 tonnes, an increase of around 31% YoY.

In Q2, continued closures prevented production of around 2,600 tonnes of refined tin. Yet even with this potential production, smelter output would have still been some 7% lower YoY.

Overall H1 refined production, however, could have increased by some 9% YoY without lockdown restrictions. This is a significant difference compared to the real 32% YoY decline seen in H1 2020.

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A view of Cerro Posokoni, Huanuni’s mining area.

The Cerro Posokoni area, which was historically exploited by artisanal miners, has been a point of contention between Comibol, and its subsidiary EM Huanuni, and the local people. Comibol have lost up to US$ 420,000 through lost production after protests at the mine earlier this month by local residents seeking jobs. However, “there are no more jobs”, Comibol CEO Zelmar Andia said in a statement, “there isn’t a single worker vacancy at Huanuni.”

Comibol have recently invested into a new processing plant, Lucianita, and tailings dam at Huanuni. These will help to double processing capacity to some 3,000 tonnes/day, according to the company. At Comibol’s other mining unit, Colquiri, a contract has been secured to begin construction of another processing plant. The new plant, with a capacity of around 2,000 tonnes/day, aims to double output. This new processing unit will work alongside the one currently operating; one will work to reprocessing tailings, while the other will process new ore, according to the manager of EM Colquiri, Sabino Arando.

Our view: Production from Comibol’s only smelter, Vinto, saw a second consecutive year of declines in 2018. Refined tin production fell 10% in 2018, from 12,637 tonnes to 11,369 tonnes. While maintenance affected output in 2017, it is thought that long-term issues with the ageing infrastructure at both Colquiri and Huanuni are beginning to impact tin production. Although the company are beginning to tackle these issues, the Lucianita processing plant encountered issues during start-up tests in January, delaying full deployment.

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Production declines in 2017 were thought to primarily be the result of maintenance work to replace the refractory brick lining inside the smelter’s Ausmelt furnace. However production in 2017 and 2018 has also been affected by underlying issues with concentrate supply due to reliance on ageing infrastructure at the two state-owned mines, Colquiri and Huanuni. In addition, in April 2018 an explosion at the state-owned Huanuni mine, which killed 10 mine workers, caused the mine to close briefly. Huanuni is still plagued theft of ore, which has had a major impact on production in recent years. It is possible that customer procurement decisions also affected Vinto’s output in 2018, with Apple halting purchases from the smelter earlier in the year with some other consumers following suit.

On the back of the poor production figures, the smelter posted exports totaling US$ 229mn in 2018, according to Ramiro Villavicencio, general manager of Empresa Metalúrgica de Vinto (EMV). In 2017, local sources reported that revenue for EMV totaled US$ 255mn; the price of tin has compounded the ongoing supply issues, falling from a high of US$ 21,910 on 29 January 2018 to a low of US$ 18,400 on 28 November 2018.

Our View: Vinto will find it difficult to boost output until upgrades to processing infrastructure at Huanuni and Colquiri are successfully implemented. Huanuni, which supplies the Vinto smelter, relies on the aging Santa Elena processing plant and has recently been struggling to maintain output. Although official figures are yet to be reported, Huanuni management figures had previously forecast tin production in 2018 to fall short of the target of 8,000 tonnes by some 30%. Construction of a more modern processing facility was completed in late 2014, but the Huanuni Mining Company has had issues getting the plant operational. The “Lucianita” processing plant has encountered problems after beginning start-up tests this month. Although the mill has only been operational for a week, widespread problems have been reported, including electrical failures and issues with water systems.

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Low production in the second half of the year has been attributed the depletion of the deposit and ore theft, the latter of which has had a major impact on production for the last two years. Moreover, the Huanuni mine has been struggling to maintain output due to the aging Santa Elena processing plant, which is being phased out, with trials ongoing at the new processing plant, Lucianita.

Despite completing the new Lucianita plant in late 2014, its use has been continually delayed due to issues with water and power supply, limiting output from the mine. Furthermore, the processing plant has also been impacted by a lack of tailings capacity. This, however, has been partially overcome by the construction of a new US$16mn tailings dam, which is now awaiting sufficient rainfall to fill it.

Our View: Although the Huanuni Mining Company has been struggling to get the new Lucianita processing plant operational, it is likely that this plant will be utilised within the next year. This could double the processing capacity at the mine, helping to improve performance in the years ahead. However, tin output is likely to increase by a lesser amount as only around a quarter of the tin mined is currently processed through the Santa Elena processing plant. The Huanuni mine is the larger of the two state-owned tin mines in Bolivia and produced 8,415 tonnes of tin in 2017. If the companies forecast is realised, the production of around 6,200 tonnes in 2018 would be the lowest since 2007.

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The 3,000tpd Lucianita plant was built by the Chinese contractor Vicstar Union Engineering under a US$50 million contract awarded in 2011 with the expectation of replacing the mines existing and ageing Santa Elena plant. However, the new plant has been unutilised since its completion in late 2014 due to issues related to the supply of water and tailings capacity. These issues are expected to be overcome by a new US$16mn tailings dam, which according to the company is now 99.5% complete.

Our View: The Huanuni mine produced 8,415 tonnes of tin-in-concentrate in 2017. Mineral theft, strikes and an explosion at the mine earlier this year have impacted production and we anticipate a lower total for 2018. The successful commissioning of the Lucianita plant could help improve performance in the years ahead as it would represent a doubling of plant processing capacity at the mine. Tin output is likely to increase by a lesser amount as we believe that less than a quarter of the mine’s production is currently processed through the existing plant. We suspect that ramp-up of the new processing plant to full capacity could also take over a year, delaying any significant improvements in tin output. The Colquiri tin-zinc mine in Bolivia is also actively seeking bids for construction of a new processing plant and intends to sign a contract with the successful party by end-October. This is its fourth such bidding round since 2016, with earlier attempts unsuccessful.

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The 3,000tpd Lucianita plant was built by the Chinese contractor Vicstar Union Engineering under a US$50 million contract awarded in 2011 with the purpose of replacing the ageing Santa Elena plant currently in operation at the mine. However, the new plant has not yet been utilised since its completion in late 2014 due to issues related to supply of water, power and tailings capacity.

While the company’s plans to start operating the plant in March 2018, only a small part of its capacity will be utilised, with the plant not expected to run at full capacity until at least Q2 2019.

ITRI View: The Huanuni mine produced 6,460 tonnes of tin-in-concentrate in 2016, down 25% from 2015. A severe drought was an extraordinary factor affecting output last year and monthly production has since recovered since, although the ongoing reliance on the ageing Santa Elena plant continues to have a negative impact on performance. This will continue to limit any potential expansion of tin output from the mine until the new plant enters full operation in at least two years’ time.

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A government proposal for the restructuring of Comibol has come under strong resistance generally from the mining sector in Bolivia, with workers unions believe the restructuring will result in a reduction of social benefits by governance under a public labour law rather than the general labour rules which provide current employment rights. The Bolivian mining ministry rejects this claim and insists that the intention is to change the current Comibol model whereby the organisation is financed by providing leases to cooperatives and private partnerships to a model of greater control and oversight by the government.

The workers at Huanuni are striking because they believe the proposals will result in cuts to the workforce as well as a 3% increase in electricity rates, according to the general secretary of the Huanuni mine workers union, Elias Colque. Workers at Huanuni are also unhappy that the government has yet to agree to an acceptable pay rise for them this year with the union claiming no perceivable pay increase has been agreed for over five years. A 2017 supreme decree outlined Bolivian mine workers were eligible for a 7% salary increase subject to performance conditions.

ITRI View: Huanuni produced 6,460 tonnes of tin in 2016, down 25% from 8,574 tonnes in 2015 according to official government statistics. The weaker performance last year was largely a result of drought in the region and ageing processing infrastructure at the mine. There are no reports of production halts at the Colquiri tin and zinc mine, where Comibol has already signed labour agreements with unions about the planned restructuring. However, strikes at Huanuni and wider unrest in the Bolivian mining sector show that dispute over the proposal has clearly reached a critical point. The extent to which the production halt will impact on Bolivian tin output will depend on the nature and length of the strikes, something that is not currently clear.

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